Monthly Archives: November 2013

Existential times

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In my teenage years, a serious-minded and rather eccentric girl seemingly dropped by aliens in a small Lancashire mill town, I was determined to be an existentialist philosopher when I grew up. I could imagine nothing more glamorous than spending my working life writing in a notebook in a Parisian cafe (I’d never been abroad). This despite having been tortured by a French syllabus that included Sartre’s [amazon_link id=”2070368076″ target=”_blank” ]Huis Clos[/amazon_link] and [amazon_link id=”2070384411″ target=”_blank” ]Les Mains Sales[/amazon_link]. The fact that he was neither a good philosopher nor a good writer didn’t put me off. For there was Simone De Beauvoir, whose novels like [amazon_link id=”207036769X” target=”_blank” ]Les Mandarins[/amazon_link] are ok, and whose [amazon_link id=”009974421X” target=”_blank” ]The Second Sex[/amazon_link] is a seriously important book.

[amazon_image id=”207036769X” link=”true” target=”_blank” size=”medium” ]Les Mandarins 1: 001[/amazon_image]

And above all, Albert Camus, the archetype of the honourable man in a dishonourable world, and a great novelist. I read [amazon_link id=”B006E3KCT6″ target=”_blank” ]La Peste[/amazon_link] tucked up in bed with an old fashioned metal hot water bottle that my mother had covered with a sock so it wouldn’t burn me. The sock had a hole and the bottle raise some small blisters on my arm. I was so wrapped up in the book that I didn’t notice the burn, but when I spotted the blisters later, ran downstairs to my bemused mum, shouting that I had caught the plague.

[amazon_image id=”B006E3KCT6″ link=”true” target=”_blank” size=”medium” ]La peste[/amazon_image]

So reading about Camus on the occasion of what would have been his 100th birthday this week – a brilliant essay by Claire Messud in the NYRB and Michael Azar in Glanta – I bought the new book of Camus essays, [amazon_link id=”0674072588″ target=”_blank” ]Algerian Chronicles[/amazon_link], edited by Alice Kaplan and translated by Arthur Goldhammer. I set aside Jonathan Fenby’s (so far) excellent [amazon_link id=”1847394116″ target=”_blank” ]Tiger Head, Snake Tails[/amazon_link] about modern China and plunged instead into Algeria at the tail end of France’s colonial occupation. Alastair Horne’s [amazon_link id=”1590172183″ target=”_blank” ]A Savage War of Peace[/amazon_link] is still as far as I know the best single book on the conflict.

[amazon_image id=”0674072588″ link=”true” target=”_blank” size=”medium” ]Algerian Chronicles[/amazon_image]

What these essays by Camus – appearing for the first time in English – add to the history is that same sense as from Camus’ wartime years of the near-impossibility of morality in polarized times. The pressures to say one side or the other is all right, the opposing side all wrong, to justify any means in terms of ends, are almost irresistible. It is very interesting to read Camus on terrorism and counter-terrorism – there is an obvious parallel with our own times. More generally, the polarization of politics away from the centre ground in the context of slow economic growth and the extreme tone encouraged by online discussion, make it interesting to look once again at existentialism. For decades it has seemed hopelessly retro (only an ignorant teen in a provincial backwater could have found it glamorous even as long ago as the 1970s); but maybe the times have circled back and ‘authenticity’ is having another moment.

Saying, doing and being

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In my coffee break, as the wind howls and the rain lashes down outside the window, I got absorbed in the chapter of [amazon_link id=”0199605068″ target=”_blank” ]The Oxford Handbook of Adam Smith[/amazon_link] on rhetoric and character. It concerns Smith’s less well-known book, [amazon_link id=”0143105922″ target=”_blank” ]The Theory of Moral Sentiments[/amazon_link].

[amazon_image id=”0199605068″ link=”true” target=”_blank” size=”medium” ]The Oxford Handbook of Adam Smith (Oxford Handbooks in Economics)[/amazon_image]

The author of this essay, Jan Swearingen, traces Smith’s views about the importance of rhetoric – the way someone communicates – as an indicator of character to classical authors. I learn that Cicero prescribed, “The cultivation of virtue through an education emphasizing self-control, moderation and civilized verbal behaviour,” and that Scottish education in Smith’s time was strongly geared towards the teaching of verbal or rhetorical style. For Smith in the [amazon_link id=”0143105922″ target=”_blank” ]Theory of Moral Sentiments[/amazon_link], humans as social beings constantly and strongly influence each other, often via verbal communication. A virtuous character could be internalized through an appropriately clear and straightforward style. Language and moral sentiment are learned together.

[amazon_image id=”0143105922″ link=”true” target=”_blank” size=”medium” ]The Theory of Moral Sentiments (Penguin Classics)[/amazon_image]

This is fascinating in many ways. One currently on my mind is the emphasis all employers place on the importance of communication skills, and their lack in young people. Another is my firm belief that people who truly understand something can explain it clearly. I also read recently Albert Hirschman’s [amazon_link id=”067476868X” target=”_blank” ]The Rhetoric of Reaction[/amazon_link]. It also, of course, relates to the very interesting notion of performativity – the capacity of language to amount to action in some circumstances.(My Tanner Lectures in 2012 discussed this in the context of economics.)

I’ve got no idea what modern scientific evidence says about the causality if any between language and character but Smith’s notion that language and ‘moral sentiments’ are so tightly bound is intuitively appealing.

Enlightened banking

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Adam Smith had firm views about the banking industry. He believed that services in general were unproductive, and would clearly have taken a dim view of claims about the contribution of banking to GDP (see my forthcoming Feb 2014 book, [amazon_link id=”0691156794″ target=”_blank” ]GDP: A Brief and Affectionate History[/amazon_link]).

[amazon_image id=”0691156794″ link=”true” target=”_blank” size=”medium” ]GDP: A Brief but Affectionate History[/amazon_image]

I was just looking at the new [amazon_link id=”0199605068″ target=”_blank” ]Oxford Handbook of Adam Smith[/amazon_link] (editors Christopher Berry, Maria Pia Paganelli and Craig Smith) as I prepare for a panel session on banking at the Festival of Economics in Bristol later this month.

[amazon_image id=”0199605068″ link=”true” target=”_blank” size=”medium” ]The Oxford Handbook of Adam Smith (Oxford Handbooks in Economics)[/amazon_image]

The essays in the section on money, banking and prices underline Smith’s caution. It describes a metaphor in The Wealth of Nations (I didn’t remember it) comparing banking to a wagon road through the air – immensely useful in helping business expand beyond its earth-bound confines, but in danger of melting if it gets too close to the sun. He was explicitly opposed to banks investing in real estate, and his descriptions of what they should be lending for are exactly the kind of provision of working capital to business that modern banks hardly do at all – it amounts to just 3% of UK banks’ total lending. A figure worth bearing in mind when the banks claim that higher equity capital requirements would restrict their ability to lend to business, as a small decline in next to nothing is less than next to nothing….

The Handbook, by the way, is a great resource for Smith-ites. I’ve dipped into it, and found some great chapters, including those on his Enlightenment context and (by Amartya Sen) on his contemporary relevance. One part covers economics; others are on the entire range of his work – for example on history, civil society, moral society. I also liked the introduction from Nicholas Phillipson, who write an excellent biography of Smith, [amazon_link id=”0713993960″ target=”_blank” ]Adam Smith: An Enlightened Life[/amazon_link] (which I reviewed for the New Statesman).

[amazon_image id=”0713993960″ link=”true” target=”_blank” size=”medium” ]Adam Smith: An Enlightened Life[/amazon_image]

How to criticise economics

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Aditya Chakrabortty wrote a characteristically acute and provocative column in yesterday’s Guardian about the sorry state of economics. Often I agree with him wholeheartedly, but not this time, not entirely.

There is certainly a need to reform the economics curriculum, as demanded by the wonderfully engaged students in the University of Manchester’s Post-Crash Economics group or in Rethinking Economics. This is why I’m enthusiastically helping Professor Wendy Carlin of UCL in her newly-launched project to develop a wholly new undergraduate curriculum – the launch workshop is taking place next Monday. I’ve been advocating curriculum reform since before the crisis – in [amazon_link id=”0691143161″ target=”_blank” ]The Soulful Science[/amazon_link] – because students have not been taught much or any of the most important recent developments in economics, from behavioural models to randomised control trial methodology. What’s more, as Michael Joffe of Imperial College points out in an article in the current Royal Economic Society newsletter, undergraduate textbooks often contain factual inaccuracies – he picks on the conventional model of the ‘U-shaped’ average cost curve. No serious subject allows textbooks to be just wrong.

[amazon_image id=”B00D0DF252″ link=”true” target=”_blank” size=”medium” ](THE SOULFUL SCIENCE: WHAT ECONOMISTS REALLY DO AND WHY IT MATTERS (REVISED EDITION) (REVISED) ) BY COYLE, DIANE{AUTHOR}Paperback[/amazon_image]

There is also a strong whiff of denialism among some economists – mainly, I would say, in American universities and right-wing think tanks. There are people who do not see the crisis as any reason to reflect on how they believe the economy works. This is hard to understand – it calls for a psychologist, perhaps, or needs explaining in terms of the defence of institutional privilege. But the denialists are a minority, even though buttressed by the huge institutional inertia in the academic world, which rewards people for doing what they’ve always done and allows them to pat each other on the back for being so similar to themselves.

Where I part company with Aditya’s column and other similar responses is in the turn to the heterodox, the people for whom the mainstream will always be wrong. The column, and a list of its anti-economics economics books Verso put out in response, both highlight Philip Mirowski’s new book [amazon_link id=”1781680795″ target=”_blank” ]Never Let A Serious Crisis Go To Waste[/amazon_link]. I’ve got a review coming out in Antipode soon – for now, I’ll just say it’s a polemic, not a work of serious scholarship. It doesn’t have anything interesting to say about the state of economics.

[amazon_image id=”1781680795″ link=”true” target=”_blank” size=”medium” ]Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown[/amazon_image]

Chris Dillow as always is a must-read on this question of how to be critical of economics without jumping the shark. Noah Smith earlier this year blogged in a similar vein – his target was the cult of Steve Keen, rather than Philip Mirowski. Alex Marsh has a new response to Chris Auld on this same question – what distinguishes good from bad criticism of economics? Interestingly, he suggests that internal critique is palatable while external critique is not – the old business about who is allowed to make the jokes. I’m sure there’s some of that, and have been introspecting for evidence of defensiveness. However, I don’t think that’s all it is.

The problem with so many critiques of economics is that they have the same flaw they see in the mainstream, namely abstraction. The critics have a different mental model of the world. They want economics to adopt their worldview. What it really needs, instead, is to move away from abstraction and engage deeply with evidence – both in terms of data collection and econometrics, and non-quantitative evidence in the shape of history and context. The future for a revived economics will be in becoming a deeply, genuinely empirical subject, not a playground for competing political philosophies.

 

How brave a new world for publishing?

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This morning’s Financial Times reports a study saying the number of insolvencies among publishers in the UK has been trending upwards, to 98 in the 12 months to August 2013, from 69 and 36 in the preceding two years. The suggestion is that although entry barriers in publishing have declined and it’s easier to reach customers thanks to digital technologies, margins have been squeezed. After all, in 2012 there were 2,450 books per million people published, which is apparently more per capita than any other country.

I’m a moderate optimist about publishing, which has been more innovative and responsive to customers than some of the other industries, swimming with the digital tides rather than paddling furiously against them. Indeed, I’m sufficiently optimistic to dabble a bit myself with Perspectives.

The FT story does note that many of the insolvencies concern magazine publishers, facing full-on competition from online and often free content. It quotes Richard Mollet of The Publishers Association (they omitted the apostrophe, not me) saying the biggest threat comes to very small publishers from self-publishing. I’m not sure that distinction makes much sense any more – it’s all competitive fringe to the bigger publishers. It isn’t entirely clear from the PA figures, but it looks to me like margins have been increasing for the book sector as a whole – sales values rose 4% in 2012 and volumes declined by 1%. And e-book margins are surely much higher than those for physical books, given the pricing points that have been so successfully established for e-books. Sales of digital books in the UK rose by 66% in 2012.

The really good news about the effects of the technological changes is that people have much greater access to things to read, and greater voice if they want to engage in the debate. So we have the paradox of an increasingly vibrant, engaged public conversation online at the same time that conventional political debate in many countries is becoming increasingly impoverished and ritualised. The public space is reverberating with informed debate – you just wouldn’t know it if you stuck to the conventional channels.